Why do you care so much about the obl? Is he your direct competition? If so whats it worth to you. . . If your really nervous. . sell him the ad month to month, at a higher rate so that you can negotiate it if you get more traction on your site, and you can stop selling it to him if its boosting his ranks above you and you don't like it.
When you say 600-800 hits . .do you mean just hits like from anything bots, repeat visits, etc. or do you mean 600-800 unique visitors?
Its really hard to evaluate if its worth selling it to him or not. All depends on what your making on the site. . how much the link back will help him on the words that you are or aren't currently ranking for.
If you really want to get it . . just make the ad link goto a page on your site that then redirects the link out to his site. Keep it internal, and check with others. . I don't know for sure but i'm pretty sure there is somekind of javascript redirect that won't pass the link juice. . Ad networks use them . .and i'm sure if you hunt around you'll find a way